January is a bleak month for retailers, and this week investors in shop stocks will be keen to know how the supermarkets and department stores fared over their peak Christmas period. This week we get a raft of updates, including from Sainsbury's, Tesco and Bradford-based Morrisons as well as Marks & Spencer and Debenhams. Grocers struggled in 2012, but did we spend enough on our festive feasting last month?
Morrisons has been one of the hardest-hit of the big four supermarkets, and analysts at Investec think it has lost out to rivals as it has the smallest opening programme and no internet business. Philip Dorgan at Panmure Gordon reckons its trading update today could even contain a profit warning, adding: "We see further downside to consensus profits, given the likely continued sales underperformance."
Mr Dorgan remains a seller of the stock, and gives it a share price target of 240p. Department-store performance will also be in focus as House of Fraser updates on the six weeks to 5 January, and tomorrow it is Debenhams' turn.
Results/Updates: Costain, Nichols, Tarsus.
Retailers share the stage with construction groups as Balfour Beatty and Persimmon announce trading updates. Panmure Gordon's Andy Brown retains his buy rating for the infrastructure expert Balfour Beatty, and gives it a share price target of 310p, as he thinks its strategy of diversifying away from cyclical construction sectors is a good move that will pay off. He adds: "A small addition to its professional service capability in the US, through the acquisition of Subsurface, is a good move. It is a reminder of the strategic push to diversify."
Results/Updates: Debenhams, Cineworld, Dunelm, Domino's Pizza, Interserve, Robert Walters, Topps Tiles.
Back to the supermarkets, when Sainsbury's reveals its third-quarter trading update. Every year, the City expects Sainsbury's Christmas sales to be poor and the shares fall ahead of the update in anticipation. Mostly the City has been proved wrong, but that didn't stop Oriel Securities' scribes predicting that Sainsbury's will have found the period tough. They say: "Sainsbury's enjoyed a very strong 2012 as a whole and generally won market share. However, we think that things have got much tougher."
Oriel's supermarket specialists think chief executive Justin King's profit forecasts could be in trouble. They say: "Like-for-like sales will have to pick up in the fourth quarter, or full-year profit before tax consensus of £742m is in trouble. More at risk still would be the 7 per cent profit before tax growth we expect for 2013-14."
Results/Updates: Greggs, Michael Page, Ted Baker, Restaurant Group.
Not sick of supermarkets yet? Eyes will turn to Tesco on Thursday. After lagging its peers in 2012, analysts at Jefferies think 2013 will be better. Jefferies' James Grzinic suggests Tesco will be the main Christmas winner, and is expected to report that like-for-like sales are improving in the UK, particularly compared with the weaker Christmas the year before. Mr Grzinic rates the shares a buy, with a 400p share price target.
Results/Updates: Marks & Spencer, Hays, Bwin.Party Digital Entertainment, Hilton Food, Goal Soccer Centres, JD Sports, London Capital Group, Rathbone Brothers, SIG, XP Power.
The oil explorer Tullow is expected to update on its new strategy at a trading update. Its shares dived late last year after it confirmed that an oil well in Ghana was dry. But analysts thought the price drop was overdone, and its purchase of Norway's Spring Energy, and planned sale of its mature UK and Dutch portfolio, will add value.
Results/Updates: Centaur Media, T Clarke, Mecom, Moneysupermarket.
New UK car registrations, Halifax monthly House Price Index, Lloyds Employment Confidence Survey.
British Retail Consortium – December sales figures.
British Retail Consortium – shop price index, trade figures, UK trade balance.
Bank of England interest rate announcement, Bank of England asset purchase target.
Industrial production data, manufacturing production data, National Institute of Economic and Social Research GDP estimate for December.Reuse content